PMI Declines Most In Eight Months

US Purchasing Manager's Index (PMI) dropped by the most in 8 months. Markit, who compiled the data, said this "will feed fears that the recovery remains on a weak foundation of intense price competition."

As if that's not bad enough, the same report indicated that inflation is surging:
"...on the inflation front, manufacturers experienced a further solid increase in average cost burdens in April." What? You mean higher prices AREN'T good news?

So Fed policies are failing to bring any real or sustainable recovery, after FIVE YEARS of trying, but they ARE stoking the fires of inflation. Historically, inflation is caused by an economy close to full employment that is overheating, by creating greater demand for products than the available supply. But now, the Fed is placing the horse before the apple cart by creating INFLATION FIRST, and hoping prosperity will follow! They are MORE likely to create STAGFLATION (high inflation + recession), and quite possibly even a hyperinflationary depression.

Meanwhile, Wall St shrugs off the bad news. Stocks are flat so far today. Dr. John Hussman, after doing considerable historical research, concludes that the current stock market is priced at DOUBLE its historical true value! And he's being generous in saying that!

And he has the evidence to prove it! In the last two recessions and stock market crashes, the stock market declined by 47% and 57% respectively. Both times, the S&P 500 declined to around the 600 level. Today, central bankers have pushed the S&P 500 to about 1875. If stocks decline in the next crash to the same level, that would represent more than a 67% LOSS in the stock market!

Soybeans Trade At Record Highs

This is surprising, given that demand from China is down. Just last Friday, China cancelled orders and prices dropped due to declining demand. Now, prices are trading at record highs.

Food Inflation Rising

...even as they deny it!

You Know the Market Is In Trouble When...

...when even the Keynesians are worried.

From Record to Red In Two Days!

Dow down more than 300 points in the past two sessions.

S&P Hits New Record High Even As Economy Weakens

As Corporate EPS Slide, Stocks Hit New Highs

Janet Yellen's speech yesterday to a group of community organizers sent stocks leaping higher once again.

However, corporate earnings have been weaker, and this sector-by-sector chart of EPS revisions shows that stocks are grossly overpriced.

Janet Yellen's Impact On Inflation

THIS is the impact of a deceitful Janet Yellen on inflation. This chart shows the price of corn today. The price was dropping, until Yellen gave a speech all but promising MORE inflation. She gave her speech before a group of COMMUNITY ORGANIZERS! Obama would be proud. THIS chart showed what happened to the price of food and other commodities when she began speaking! It not only reversed. It LEAPED higher!

 Here is the link to the story from Fox News. She makes it sound so good, but the reality is NOTHING like what she claims in her speech. The reality is that her policies benefit only the already-rich! They create bubbles, NOT prosperity. They don't create jobs or lasting, self-sustaining prosperity. She can spout theory all she wants, but history and reality don't support her pablum. Her policies just redistribute the wealth!

And Obama's legions of leeching lemmings believe those lies!
http://www.foxbusiness.com/ind ustries/2014/03/31/y...

The #1 criteria for becoming a Fed Chairman is the ability to LIE through their teeth, straight-faced, without batting an eye!

By keeping interest rates so low for so long, all their do is create more and more bad debt, and none of it is ever cleared out of the economy so that it can heal! This only creates MORE bad debt and MORE risk! It only adds one story upon another to the house of cards!

Dairy Futures Continue to Skyrocket

This is the price of milk since last summer. As you can see, it has been rocketing higher and higher. As some point, the Federal subsidies won't be enough to contain the price. Prepare for dairy prices to skyrocket.

The Bubble Is Still Intact

Meanwhile, I sent this text to a friend yesterday:
All this today:
Unemployment claims were unexpectedly high, US sanctions on Russia, Russia is retaliating, housing is tanking, existing homes sales drop 18%, Philly Fed employment lower, Caterpillar sales drop 15 months in a row, largest steel maker in China defaults on debt, Russia now threatening to invade Estonia, and Wall st thinks stocks are worth MORE today vs yesterday. This is classic bubble!

Become Vegetarian

Or go bankrupt. Here is the price of pork futures. It doesn't show any signs of slowing down, either.

Even the daily and 4-hr charts show no signs of fatigue:

Stocks Slide As China Real Estate Shows Signs of Bubble Popping

Wall St Loves Putin

As Putin began speaking to his parliament, stocks leaped higher in apparent approval of Putin's bold aggression against another country. Putin threatened "retaliation" against Western governments that impose sanctions. Wall St loves tyrants, and always has.

Leading Economic Indicator Goes Limit Down In Bad Sign for Global Economy

So what is this leading economic indicator? Copper!

Wholesale Sales Drop, Stocks Ignore Data

Meat Prices Skyrocket

Even As Service Sector Collapses, Stocks Go Parabolic!

ISM Services headline index collapsed to 51.6 (missing expectations of 53.5) to its lowest since February of 2010. We are sure many will proclaim this as "weather-related" but remember the strong performance of the Manufacturing print. Respondents worried about weather, Obamacare, and oil prices... as the employment sub-index crashed from 56.4 (highest since Nov 2010) to 47.5 (lowest since Mar 2010) - the biggest drop since Lehman!

Weak Data, Market Surges

This is a perfect prescription for a bubble. This will not end well.

Monitoring baloney. The Fed is fueling a bubble, and they know it!

The Real Economy!

Home purchase applications are down 30% from their May 2013 highs plunging in the last few weeks to their lowest level since 1995. Home purchase applications are now at 19-year lows.

Meanwhile, stocks are hitting new record highs as I type this. Central bankers have so deluded investors into believing that easy money and prosperity is perpetual, that they throw caution to the wind. That only fuels the bubble that brings certain collapse.
Harvard historian/economist Niall Ferguson says in one of his books that bubbles would be impossible without central bankers printing/creating endless money to create those bubbles.

The world's foremost expert on bubbles said this:
“The collapse is fundamentally due to the unstable position; the instantaneous cause of the crash is secondary.” Didier Sornette

Central bankers are enabling and empowering both the bubble, and the eventual collapse.

Bad News Buoys Stocks

A few of today's headlines:

JP Morgan announced today that it will lay off 17,000 mortgage bankers. Imagine how many they would have laid off if there was NO housing recovery.
Case Shiller shows 2nd month of decline, says there is a "bleaker picture for housing".
Consumer confidence drops most in 4 months.
POMO continues. Fed monetizes $2.65 billion TODAY!
Richmond Fed Manufacturing Index declines, goes into negative territory! 

If this "recovery" is so great, why is the Fed still pumping money for life support nearly every day?

Meanwhile, stocks did this: